CANADA FX DEBT-C$ strengthens to 3-week high; pares gains as oil falls

Wed Aug 10, 2016 5:23pm EDT
 
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(Adds analyst comments, updates prices)
    * Canadian dollar ends at C$1.3064, or 76.55 U.S. cents
    * C$ touches its strongest since July 19 at C$1.2990
    * Bond prices mixed across flatter maturity curve
    * 10-year yield touches its lowest since July 11 at 0.965
percent

    By Fergal Smith
    TORONTO, Aug 10 (Reuters) - The Canadian dollar strengthened
to a three-week high against its broadly weaker U.S. counterpart
on Wednesday, although gains were pared as crude oil fell.
    The U.S. dollar fell against a basket of major
currencies as investors awaited a speech by Federal Reserve
Chair Janet Yellen later this month in the absence of new major
economic reports that could provide signs of economic strength.
 
    Position squaring has dominated after the market bought the
greenback following a robust U.S. jobs report last week, said
David Bradley, director of foreign exchange trading at
Scotiabank.
    The Canadian dollar ended at C$1.3064 to the
greenback, or 76.55 U.S. cents, stronger than Tuesday's close of
C$1.3123, or 76.20 U.S. cents.
    The currency's weakest level of the session was C$1.3122,
while it touched its strongest since July 19 at C$1.2990.    
    Oil fell after the second-biggest weekly draw in U.S.
gasoline this summer was countered by an unseasonal build in
crude stockpiles. U.S. crude oil futures settled $1.06
lower at $41.71 a barrel. 
    In quiet summer markets, the Canadian dollar has begun to
track fluctuations in crude oil more closely, said Bradley.   
    Canadian government bond prices were mixed across a flatter
maturity curve, with the two-year bond flat to yield
0.508 percent and the benchmark 10-year rising 22
Canadian cents to yield 0.992 percent.
    The 10-year yield touched its lowest since July 11 at 0.965
percent.

 (Reporting by Fergal Smith; Editing by Jeffrey Hodgson and
Sandra Maler)